In the 1920 case of Miller & Lux, Incorporated v. Sacramento & San Joaquin Drainage District, the U.S. Supreme Court ruled on a dispute over water rights and land reclamation in California's Central Valley. The plaintiff, Miller & Lux Inc., was an agricultural corporation that owned large tracts of farmland in the region and objected to plans by the defendant drainage district to divert water from its lands for public use without compensation. The court held that while states have broad authority to regulate waters within their borders for public benefit under police power doctrine, they cannot do so arbitrarily or discriminatorily at expense of private property owners without due process or just compensation as required by Fourteenth Amendment protections against state infringement upon property rights. Therefore, it found in favor of Miller & Lux Inc., ruling that its constitutional rights had been violated by uncompensated diversion of waters from its properties.

The dissenting opinion in the case of Miller & Lux, Incorporated v. Sacramento & San Joaquin Drainage District argued that the majority's decision was inconsistent with previous rulings and principles of fairness. The dissenters believed that the assessment levied by the drainage district should have been considered a tax rather than an exercise of eminent domain power. They contended that if it were treated as a tax, then it would be subject to equal protection requirements under the Fourteenth Amendment, which they felt had not been met in this instance due to unequal burdens placed on different landowners within the district. Furthermore, they disagreed with how benefits from reclamation projects were calculated for individual properties and suggested these calculations unfairly benefited certain landowners at others' expense.